Scholastic Increases Profits and Secures $400 Million From Real Estate Transactions
New York, Friday, 19 December 2025.
Scholastic posted $55.9 million in net income while unlocking over $400 million through strategic real estate sales, signaling a major liquidity boost alongside a $150 million share repurchase plan.
Fiscal 2026 Second Quarter Financial Performance
Scholastic Corporation (NASDAQ: SCHL) has delivered a robust financial update for the second quarter of fiscal 2026, which ended on November 30, 2025 [1]. The company reported net income of $55.9 million, a significant increase of approximately 14.549% from the $48.8 million recorded in the same period last year [5]. This profitability boost was reflected in earnings per share (EPS), which rose to $2.17 compared to $1.71 in the prior year’s quarter [5]. On an adjusted basis, excluding non-recurring costs, earnings per share reached $2.57 [4]. Total revenue for the quarter saw a modest increase, rising to $551.1 million from $544.6 million in the previous year [5].
Segment Analysis: Publishing Strength versus Education Headwinds
The quarter’s growth was primarily driven by the Children’s Book Publishing and Distribution segment, where revenues increased by 4% to $380.9 million [1]. Within this segment, Book Fairs performed particularly well with revenues of $242.0 million, marking a 5% increase, while Trade revenues grew by 7% to $110.4 million [1]. International revenues also contributed positively, rising 4% to $89.5 million [1]. However, these gains were partially offset by challenges in other areas; Education Solutions revenues declined by 13% to $62.2 million, and the Entertainment segment saw a 10% decrease to $15.1 million [1]. Despite the mixed segment results, the company’s streaming app has shown promise, garnering over 3.5 million views since its launch in September 2025 [1].
Unlocking Capital Through Strategic Real Estate Transactions
A pivotal element of Scholastic’s recent strategy has been the monetization of its real estate assets. On December 18, 2025, the company closed sale-leaseback transactions for its New York City headquarters and its Jefferson City, Missouri distribution center [2]. These transactions generated estimated net proceeds of approximately $401 million [2]. This massive infusion of liquidity is expected to significantly benefit the company’s free cash flow for the full fiscal year 2026, which is now anticipated to exceed $430 million [1]. Management has indicated that while these transactions will result in a partial-year reduction of $14 million in adjusted EBITDA for fiscal 2026 due to lease costs, the long-term balance sheet flexibility is a priority [1].
Shareholder Returns and Future Outlook
Scholastic is actively utilizing its capital to enhance shareholder value. The Board of Directors has authorized a new share repurchase program of up to $150 million [1]. This follows a consistent trend of capital return; since 2021, the company has returned nearly $500 million to shareholders and reduced its share count by 25% [1]. Additionally, a quarterly cash dividend of $0.20 per share was announced on December 17, 2025 [2]. Looking ahead, President and CEO Peter Warwick stated that the company is focused on accelerating profitability in the second half of the fiscal year [1]. For fiscal 2026, Scholastic anticipates adjusted EBITDA to land between $146 million and $156 million [1].